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Banque Sofinco

FANNIE Mae will attempt to repeat the success of its Benchmark Note issuance programme and create a liquid, international market for callable product later this month when it launches a new issuance programme -- Callable Benchmark Notes. Callable debt is a key part of the US agency's funding, allowing it to manage the interest rate risk on its $433bn mortgage portfolio. In 1998, Fannie Mae issued more than $90bn of its $147bn long term funding in callable and other option-embedded funding instruments.

CORPORATE new issue activity is hotting up in Spain in the wake of the government's successful sale of shares in defence group Indra, with construction group Ferrovial Agroman leading a potentially long line of private sector flotations. Morgan Stanley Dean Witter and BBV are leading the IPO, which could raise around $1bn through the sale of some 30%-35% of the company. The IPO follows a reorganisation of Ferrovial -- whose interests include construction, real estate and services -- including a merger of its construction business with its Agroman subsidiary.

NEXT WEEK will see the London and Frankfurt launch of a Eu500m deal for Amev Leven, the life insurance company that is the jewel in the crown of financial services group Fortis. Earlier this week the deal was selling well with banks, insurance companies and fund managers at roadshows in Amsterdam, Paris and Brussels.

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Market commentary: Compiled by Jim Webber, TD Securities, London

MERRILL Lynch has landed two prize mandates for the second quarter, whose progress will be closely watched by market participants. The firm will lead the secondary offering for Global Telesystems Group (GTS) which filed this week for the sale of 10m shares. The deal could raise around $650m based on its current stock price of $65.

THE REPUBLIC of Hungary this week achieved its long held ambition of becoming the first central and eastern European borrower to issue a SEC registered global bond. Bookrunners ABN Amro and Salomon Smith Barney yesterday (Thursday) launched the Baa2/BBB rated transaction which had been delayed for two weeks in the wake of the Nato air strikes against Serbia, with which Hungary shares a border. The seven year issue, which emerged for $500m versus an original $750m target, will be priced at 14:00 GMT today (Friday) at a launch spread of 145bp over the off-the-run 5.625% February 2006 US Treasury, equivalent to 164bp over the curve.

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IT IS THAT end of the quarter time of the year again when fixed income chieftains and syndicate heads either dance in the streets, drown their sorrows or try to slink under the nearest stone. What a rock 'n' roll quarter it has been with the arrival of the euro -- combined with the February collapse of the Treasury market, which was the worst monthly setback since 1980.

India The first roadshows were held in London on Tuesday and in Paris today (Thursday) for the $165m 10 year limited recourse shipping facility for the Enron Mitsui LNG carrier.

THE EUROPEAN high yield bond market continued to revive this week, with sterling deals from UK cable operators Telewest and NTL Communications Corp, and specialist materials producer Luxfer generating enormous demand. European high yield issuers have been wary of coming to the market since the autumn 1998 Russian debacle exstinguished investor appetite for risk.